Question

2. National income = 3000, Net foreign factor outcome from a country = 200, indirect business taxes = 1300. gross domestic product = 6000. Find Consumption of fixed capital. 3. Unemployment rate, amount of unemployed and amount of population out of labor are accordingly 8%, 320000, 2000000. Find the total population and labor force of a country 4. Initial GDP, GDP growth and multiplier are accordingly 1600, 400 and 2.5. Find marginal propensity to consume, last GDP and additional consumption. 5. Initial Disposable income 2000, Last Disposable income 2400, Last expenditure 1800, Average propensity to consume in initial year 0,75. Find Initial saving and Marginal propensity to consume.

4 of them needed to be solved

Answer 1

2. consumption of fixed capital= GNP-NNP

= (GDP-Net indirect taxess- net factor income)- national income

=6000-1300-200-3000

= 1500

3. Unemployment rate= (unemployed people/labour force)*100

labour force= unemployed people*100/unemployment rate= 320000/0.8=400,000

population= labor force + population out of labor= 400,000+2000000= 2400,000

4. multiplier= 1/1-MPC

MPC= 1-1/multiplier= 1-1/2.5=1-.4=0.6

GDP growth= (last GDP-intial GDP)/ initial GDP

400/100= (x-1600/1600

4800=x-1600

x=6400

last GDP=6400

additional consumption= MPC*initial GDP= 0.6*6400=3840

5. Average propensity to consume= consumption/disposable income

at the initial year, 0.75= initial consumption/2000

initial consumption= 1500

initial savings= 2000-1500

change is disposable income= last disposable income- initial disposable income= 2400-2000=400

change in consumption= last expenditure-initial expenditure= 1800-1500=300

MPC= change in consumption/change is disposable income= 300/400=0.75